SOCAR agrees with foreign companies to search for promising structures in Caspian Sea
Azerbaijan’s state oil company SOCAR has reached agreements with a number of foreign companies on identification and initial exploration of promising structures in the Azerbaijani sector of the Caspian Sea.
SOCAR President Rovnag Abdullayev made the remarks at an event dedicated to the Oilman’s Day in Azerbaijan on September 19.
Speaking about the development of gas fields in Azerbaijan, he also noted that in 2020, drilling of a new well will start from the second platform of the Umid gas condensate field, adding that the well will be commissioned in 2021.
SOCAR announced the discovery of the Umid field in 2010. A risk service contract (a contract with a minimum guarantee of compensation) for exploration and development of an offshore block including the Umid gas field and the promising Babek structure in the Caspian Sea was signed between SOCAR and SOCAR Umid Oil and Gas Ltd. on January 12, 2017.
According to SOCAR’s data and the first exploration drilling, the field has over 200 billion cubic meters of gas and 40 million tons of condensate.
Abdullayev further stressed that initial engineering and design work as part of the SOCAR GPC Project, which envisages construction of a gas processing and petrochemical complex, has been completed.
“The complex will become another contribution to the development of Azerbaijan’s chemical industry. Presently, the talks in this regard continue with foreign investors,” Abdullayev stressed.
It was earlier reported that the construction of SOCAR GPC complex, consisting of gas processing and polymer factories, is scheduled to start in late 2018 - early 2019.
The complex will be located in the village of Sangachal on the territory of 305 hectares, and 250 hectares will be allocated only for construction. The cost of the project, according to initial estimates, is approximately $4 billion.
SOCAR president also noted that the company intends to expand sales of compressed natural gas (CNG) in the coming years.
“This year SOCAR took the first steps to create a CNG market in Azerbaijan. For now, there is little demand for CNG in Azerbaijan, but the global demand for it is growing rapidly. It is expected that global demand will quadruple by 2025. In this regard, SOCAR defined the expansion of CNG sales as a promising direction,” SOCAR President mentioned.
Funds to increase SOCAR’s authorized capital revealed
In turn, SOCAR Vice President for Economic Issues Suleyman Gasimov told reporters that SOCAR received 1/3 of the funds envisaged in the state budget to increase the company’s authorized capital, in connection with the work at the Umid-Babek and Karabakh fields.
Gasimov noted that SOCAR will receive 663 million manats ($390 million) from the state budget for 2018 to increase its authorized capital in connection with drilling operations, further saying that one third of the funds, in the amount of 221 million manats ($130 million), has already been allocated.
The Karabakh oil and gas field, discovered in 2000, is located 130 kilometers to the east of Baku. The sea depth in the field varies in the range of 250-450 meters. The initial oil reserves of the field are estimated at 100 million tons.
The recoverable reserves of the Karabakh field are estimated at 16 million tons of oil and 28 billion cubic meters of gas. The sea depth in the area of the field is 180 meters.
SOCAR operates Karabakh field’s development. The company expects to receive the first reserves from the field in 2021.
SOCAR announced the discovery of the Umid field in 2010.
A risk service contract (a contract with a minimum guarantee of compensation) for exploration and development of an offshore block including the Umid gas field and the promising Babek structure in the Caspian Sea was signed between SOCAR and SOCAR Umid Oil and Gas Ltd. on Jan. 12, 2017.
According to SOCAR’s data and the results of drilling of the first exploration well, the field has over 200 billion cubic meters of gas and 40 million tons of condensate.
The reserves of the Babek structure may stand at 400 billion cubic meters of gas and 80 million tons of condensate, according to preliminary data.
SOCAR is a wholly state-owned national oil company headquartered in Baku, Azerbaijan. The company produces oil and natural gas from onshore and offshore fields in the Azerbaijani section of the Caspian Sea.
The company includes three production associations, one oil refining and gas processing enterprise, an oil flotilla, a deep-water base plant, two trusts, one institute, and 23 structures.
SOCAR established joint companies (including Georgia and Turkey), alliances, operating in various sectors of oil and gas spheres. It has representative offices in Georgia, the U.S., Turkey, Romania, Austria, Switzerland, Kazakhstan, Great Britain, Iran, Germany, Ukraine, Belgium and Canada.